1 Financial Assets Management

2 Consulting

3 Financing

4 Advisory Services

5 Investment

Investors

Corporations

135135

3,6003,600

16.616.6

2.32.3

2020

48.448.4

branches andsales offices

thousand

trillion

trillion trillion

¥

¥¥

countries and regions

Number of Branches and Sales Offices in Japan—Daiwa Securities

Daiwa Securities Co. Ltd. opened nine new sales offices in FY2013. Through an extensive network of 118 branches and 17 sales offices, Daiwa Securities provides a wealth of financial products and services while also serving as an agent for Daiwa Next Bank, Ltd.

Cash Management Service Accounts—Daiwa Securities

The number of cash management service accounts continues to exhibit firm growth. Daiwa’s cash management service delivers a high level of convenience through the integrated management of customers’ assets from deposits through withdrawals to asset management.

Customer Assets under Custody—Daiwa Securities

In FY2013, the balance of customer assets at Daiwa Securities greatly increased, centered on equity and mutual funds, amid the favorable market conditions mainly on the back of the weak yen and high stock prices. Successful steps are being taken to steadily expand and solidify the customer base in Japan.

Deposits in Daiwa Next Bank

Daiwa Next Bank continues to steadily expand its deposit balance. Since it began to handle foreign currency deposits, the bank has surpassed ¥200 billion in seven quarters. By introducing a sweep feature linked to the general securities and NISA accounts at Daiwa Securities, Daiwa Next Bank is leading to growth in new securities transactions.

Number of Overseas Bases

Working through its overseas network as a comprehensive financial services group, the Daiwa Securities Group supports Japanese companies in their efforts to procure funds and expand their businesses overseas while providing a variety of products that help to deliver international diversified investments to investors in Japan.

Assets under Management

While the industry as a whole and other major companies continue to stagnate at levels lower than those recorded prior to the financial crisis in 2008, the balance of mutual funds of the Group’s two asset management subsidiaries hit a record high of ¥11.2 trillion. As a result, the Daiwa Securities Group continues to maintain its industry-leading market share.

Business Scale of the Daiwa Securities Group

Notes: 1 . The number of Daiwa Securities branches and sales offices in Japan is as of June 30, 2014. Other figures are as of March 31, 2014 or results from FY2013. 2 . Net assets under management are the total for Daiwa Asset Management Co. Ltd. and Daiwa SB Investments Ltd.

Primary Businesses of the Daiwa Securities Group

● Equities, bonds, investment trusts, fund wrap, bank deposits, pension insurance and others

● Wealth management, inheritance-related services and others

● Equities and debt underwriting

● M&A

● Venture capital investment and private equity investment

2 Corporate Summary

Primary Businesses of the Daiwa Securities Group

Daiwa Securities Group Annual Report 2014

1 Financial AssetsManagement

The Daiwa Securities Group meets the asset management needs

of individual investors, institutional investors and pension funds

by providing an extensive lineup of investment products – stocks,

bonds, investment trusts and “fund wrap” – as well as investment-

related services, timely information and investment advice.

Customers can take advantage of various functions and

capabilities, including a contact center, online trading, banking

and securities trading functions.

2 ConsultingThe Daiwa Securities Group provides consulting advice to

individual customers on issues such as wealth management,

pensions, insurance and inheritance. Consulting services for

corporate clients offer support for business succession, business

insurance and employee benefit issues.

3 FinancingThe Daiwa Securities Group offers underwriting and other

advisory services to match the financing needs of corporations,

national and local governments, international institutions,

public corporations and other entities, for their capital

investments, research and other activities. The Group helps

them in financing by issuing stocks and bonds, or by securitizing

other assets and selling them as structured products.

4 Advisory ServicesThe Daiwa Securities Group offers consulting and intermediary

services to help client corporations expand their operations,

particularly via mergers and acquisitions. The Group has a global

network covering Japan, Europe, Asia and the Americas, which

helps vibrant corporations in Japan and overseas to identify and

conclude cross-border M&A agreements.

5 InvestmentThrough Group companies of private equity firms, the Daiwa

Securities Group takes capital positions in unlisted companies –

both new ventures and established businesses – using hands-on

investment techniques to supply these companies with

management support as well as funding.

A comprehensive financial services group that serves investors and corporations, by helping them to access capital markets, while also playing a valuable role in society by contributing to economic growth and social development.

Capital Market

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Daiwa Securities’Domestic Branch Network

Sales Offices Openedbetween June 2013 and June 2014

Hokkaido and Tohoku Region 10 offices

Kanto Region (excl. Tokyo) 27 offices

Tokyo Area 36 offices

Chubu and Hokuriku Region 19 offices

Kinki Region 20 offices

Chugoku and Shikoku Region 13 offices

Kyushu and Okinawa Region 10 offices

Total 135 (118 head and branch offices / 17 sales offices)

San FranciscoNew York

Sao Paulo

Melbourne

Singapore

Bangkok

Shakujii-Koen Sales Office

Sengawa Sales Office

Eifukucho Sales OfficeShin-KoiwaSales Office

Sangenjaya Sales Office

Yoyogi UeharaSales Office

ManilaHo Chi Minh City

Taipei

TokyoShanghaiBeijing

Mumbai

Kuala Lumpur

Jakarta

Bahrain

Seoul

Yangon

Hanoi

London

Moscow

Warsaw

Hilversum Copenhagen

Frankfurt

Geneva

Kita Senri Sales Office

Fushimi Sales Office

Manchester

Lyon

Paris

Madrid

TheDaiwaSecuritiesGroupoverseasoffices

Businessalliances

Saginuma Sales Office

Narimasu Sales Office

Musashi Kosugi Sales Office

Musashi Koyama Sales Office

Hong Kong

2013Jun. Fushimi Sales Office Kyoto

Jul. Kita Senri Sales Office Osaka

Aug. Shakujii-Koen Sales Office Tokyo

Sep. Eifukucho Sales Office Tokyo

Oct. Saginuma Sales Office Kanagawa

Nov. Narimasu Sales Office Tokyo

Nov. Musashi Koyama Sales Office Tokyo

2014Feb. Musashi Kosugi Sales Office Kanagawa

Mar. Yoyogi Uehara Sales Office Tokyo

Apr. Sangenjaya Sales Office Tokyo

Apr. Sengawa Sales Office Tokyo

Jun. Shin-Koiwa Sales Office Tokyo

Domestic and Overseas Network of the Daiwa Securities Group(As of June 30, 2014)

4 Corporate Summary

Domestic and Overseas Network of the Daiwa Securities Group / Business Topics in FY2013

Daiwa Securities Group Annual Report 2014

Tokyo

2013

2013

2014

April Daiwa Securities and Daiwa Next Bank launch “Premium Service” and “Family Plus”.*1

May Total balance of deposits in Daiwa Next Bank’s foreign currency-denominated accounts surpasses ¥100 billion just ten months after the service was launched (July 2012). Growth in the total balance is on track to surpass ¥200 billion by March 2014.

June Daiwa Securities jointly manages the largest-ever issuance of corporate bonds for individual investors – a ¥400 billion issuance by SoftBank Corp.

November Daiwa Securities arranges and distributes the Banking on Women Bonds to individual and institutional investors. The bonds, issued by International Finance Corporation (IFC), are the first bond program in Japan focused on providing financial support to women entrepreneurs in emerging countries.

December For China Everbright Bank’s public listing in Hong Kong, Daiwa Capital Markets Hong Kong Limited acts as joint book runner for its global offering, while Daiwa Securities serves as sole lead manager for the offering in Japan (POWL*2).

Daiwa Securities Group forms a business alliance with Malaysia’s Affin Investment Bank Bhd., in the equity brokerage businesses.

April Daiwa Securities Group Inc. established the Daiwa Myanmar-Japan Foundation—a scholarship fund which offers individuals who are expected to play a central role in Myanmar’s financial markets a chance to gain educational experience in Japan. The first group of three students from Myanmar stayed in Japan from August to February.

Daiwa Institute of Research Ltd. formed a joint venture with ACE Data Systems Ltd. of Myanmar, under the name DIR-ACE Technology Ltd.

It was the first Japan-Myanmar joint venture to provide IT services in Myanmar. It established Myanmar’s very first data center in Yangon, which commenced operations in July.

December The Daiwa Myanmar-Japan Foundation and the Myanmar Institute of Certified Public Accountants signed a memorandum of understanding, under which the foundation will help with human capacity building for accountants in Myanmar.

Daiwa Securities and Myanmar Securities Exchange Centre Co., Ltd concluded an IPO advisory services contract with Asian Green Development Bank Ltd., in conjunction with its expected listing on the soon-to-be established Yangon Stock Exchange.

January Daiwa Securities sets up NISA specialized funds that require no purchase commission, in line with the launch of the NISA.

February Daiwa Securities Group Inc. forms a business alliance with the Australia and New Zealand Banking Group (ANZ), in the M&A advisory business.

March Daiwa Real Estate Asset Management Co. Ltd. begins managing Japan’s first health care-related REIT fund which invests in health care facilities, including housing and residential facilities for the elderly (fund was created in January).

September Daiwa Securities Group Inc. forms a business alliance with Bahana Securities, a securities brokerage controlled by the Indonesian government. The alliance covers equity brokerage and investment banking operations.

May Daiwa Institute of Research Ltd. reached an agreement with the Central Bank of Myanmar under which it will develop a cloud-type computing system for the bank, and provide it with technical support in the IT field.

Efforts to Develop Stock Markets in Myanmar during FY2013

*1 “Premium Service”: Offers customers preferential interest rates on Japanese yen time deposits, based on their current appraisal value of assets under custody at Daiwa Securities. “Family Plus”: Allows all family members to benefit from Premium Service features.

*2 POWL: Public Offering Without Listing allows overseas companies to use equity markets in Japan in order to acquire capital by issuing and selling securities without having to list their shares on a Japanese stock exchange.

Business Topics in FY2013

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Millions of yen (Except as otherwise specified)

FY2009 FY2010 FY2011 FY2012 FY2013

Operating Performance

Operating revenues 537,914 403,042 422,375 525,412 642,830 　Commissions 252,863 218,630 220,845 229,523 301,937 　　Brokerage commission 55,841 50,665 40,783 48,872 89,634 　　Underwriting commission 54,339 26,303 19,508 26,684 29,606 　　Distribution commission 33,451 31,580 49,139 46,608 55,968 　　Other commission 109,232 110,082 111,415 107,359 126,729 　Net gain on trading 110,955 92,477 79,416 123,537 156,500　　Profit (loss) on equity trading 24,481 (8,797) (6,464) 38,182 47,315　　Profit on bond and

　　 foreign exchange trading 86,474 101,274 85,880 85,355 109,185 　Net gain (loss) on private equity and

　 other investments 75,584 (17,259) 1,956 16,531 17,454 　Interest and dividend income 54,729 71,916 79,762 93,276 107,975 　Service fees and other revenues 43,783 37,278 40,396 62,545 58,964 Interest expense 47,659 58,062 59,691 70,131 60,333 Cost of service fees and other revenues 32,150 26,415 26,668 37,973 40,546 Net operating revenues 458,105 318,565 336,016 417,308 541,951 Selling, general and administrative expenses (SG&A) 362,844 363,920 359,729 333,496 357,358 Operating income (loss) 95,261 (45,355) (23,713) 83,812 184,593 Ordinary income (loss) 102,918 (32,602) (12,201) 95,176 197,045 Net income (loss) 43,429 (37,332) (39,435) 72,910 169,457 Comprehensive income (loss) — (45,049) (52,580) 139,327 221,257 Financial Conditions (Fiscal year-end)

Total assets 17,155,345 16,842,412 18,924,038 19,049,099 19,480,864　Trading assets 7,654,334 6,770,479 8,876,950 8,849,128 7,110,968 　Private equity investments 218,841 177,561 138,177 113,834 107,860 　Investment securities 191,905 188,857 159,096 192,906 200,456 Net assets 1,017,529 921,399 951,702 1,082,567 1,253,463 Per Share Data (Yen)

Net income (loss)* 26.41 (21.90) (23.41) 43.00 99.63 Net assets 530.27 496.76 463.04 536.72 633.53 Cash dividends applicable to the year 13.00 6.00 6.00 15.00 34.00 * Net income (loss) per share is calculated on the basis of the average number of shares outstanding during the fiscal year.

Financial HighlightsDaiwa Securities Group Inc. (Consolidated)Note: Please refer to pages 60–61 for the “Twelve-Quarter Financial Summary.”

Net Operating Revenues

(¥ billion)

Ordinary Income

(¥ billion)

Net Income

(¥ billion)

2009

458

2010

318

2011

336

2012

417

2013

541

0

100

200

300

400

500

600

2009

102

–32–12

95

197

2010 2011 2012 2013–50

0

50

100

150

200

2009

43

72

169

–37 –39

2010 2011 2012 2013–60

0

60

120

180

(Fiscal year) (Fiscal year) (Fiscal year)

6

Daiwa Securities Group Annual Report 2014

6 Corporate Summary

Financial Highlights / Operational Data

Billions of yen (Except as otherwise specified)

FY2011 FY2012 FY2013

Daiwa Securities

　Customer assets* 41,451 45,967 48,471　　Equities 19,838 23,862 26,703　　Bonds 14,357 13,952 13,012　　Investment trusts 6,393 7,138 7,594　　Others 861 1,014 1,161

　 Sales of core products (Retail division)

　　Mutual funds 2,049 1,842 2,428　　Foreign bonds and others 999 1,104 1,469

　Net inflow of retail assets (Retail division) 1,060 615 522　　Individuals 807 404 255　　Unlisted corporations, etc. 253 210 266

　Cash Management Service (CMS) accounts* (thousands) 3,455 3,492 3,603

　Online trading accounts* (thousands) 2,457 2,586 2,753

Daiwa Asset Management

　Net assets under management* 9,125 10,476 12,023　　Mutual funds 6,624 7,875 8,958　　Bond investment trusts 2,500 2,600 3,065* As of the end of each fiscal year

100 millions of yen

3/13 3/14

Total Qualifying Capital (D)=(A)+(B)+(C) 9,531 10,804

Tier 1 Capital (common equity, etc.) (A) 9,048 10,218

Tier 1 Capital (other) (B) — 157

Tier 2 Capital (C) 483 429

Total Risk-Weighted Assets (E) 47,552 49,515

Credit Risk 27,526 29,205

Market Risk*1 12,758 11,557

Operational Risk*1 7,268 8,753

Consolidated Tier 1 Capital Ratio (common equity, etc.) (A)/(E) 19.0% 20.6%

Consolidated Tier 1 Capital Ratio ((A)+(B))/(E) 19.0% 20.9%

Consolidated Capital Adequacy Ratio*2 (D)/(E) 20.0% 21.8%*1 Market and Operational Risk hereunder is computed by multiplying each risk amount by 12.5 (the reciprocal of 8%).*2 Consolidated Capital Adequacy Ratio hereunder is calculated under the principle of Financial Service Agency Public Notice 130 of the Financial Instruments and Exchange Act (Article 57-17-1).

Operational DataDaiwa Securities Group Inc. and Consolidated Subsidiaries

Consolidated Capital Adequacy Ratio

The consolidated total capital adequacy ratio was 21.8% as of March 31, 2014.

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